Kuwait’s Agility enters fray for logistics group Panalpina

A rival proposal could force DSV to sweeten its offer for Panalpina. (Reuters)
Updated 16 February 2019
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Kuwait’s Agility enters fray for logistics group Panalpina

  • Panalpina and Agility said that they were discussing how the two companies’ logistics operations could work together
  • The entry of Agility into the fray provides the Swiss company with an alternative to DSV’s offer

ZURICH: Kuwait-based Agility Group is talking to Panalpina over a tie-up that complicates Danish rival DSV’s $4 billion bid for the Swiss logistics group that is being fought by Panalpina’s biggest shareholder.
Panalpina and Agility said on Friday that they were discussing how the two companies’ logistics operations could work together. Agility, with 22,000 employees and $4.6 billion in annual revenue, has been expanding globally under managing director Tarek Sultan.
Panalpina added that it was still reviewing the DSV proposal “according to its fiduciary duties.”
The entry of Agility into the fray provides the Swiss company with an alternative to DSV’s offer. The Ernst Goehner Foundation, which owns 46 percent of Panalpina, has said it wants the company to be an industry consolidator, not prey for a rival.
Panalpina “is in discussions with Agility Group on potential strategic opportunities with regard to their respective logistics businesses,” Panalpina’s board of directors said in a statement. “The discussions between the two companies are at a preliminary stage.”
Agility said in a statement on its website it was “always exploring opportunities to grow” but that there are no guarantees a deal will be reached.
A rival proposal could force DSV Chief Executive Jens Bjorn Andersen to sweeten his cash-and-shares offer for Panalpina. Andersen, who said last week he remains in pursuit of a deal, has faced hurdles in Switzerland as he seeks to grow DSV’s footprint, having failed last year in his $1.55 billion bid for Swiss freight forwarder CEVA Logistics.
An analyst from Baader Helvea said Agility’s entry shows Panalpina is looking for other options beyond DSV. “We see this as another indication that the main Panalpina shareholder will not accept the current offer from DSV,” wrote Christian Obst in a note to investors.
Panalpina shares were indicated 1.7 percent lower in pre-market activity after closing on Thursday at 149 Swiss francs ($148), below the DSV offer worth about 170 francs per share.
The 20 largest freight forwarders control only about a third of the market, making the industry potentially ripe for takeovers or partnerships.


US penalizes Chinese firm

Updated 3 min 5 sec ago
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US penalizes Chinese firm

  • Sanctions are part of Trump’s effort to increase pressure on Tehran

WASHINGTON: The Trump administration is penalizing a Chinese company and its top executive for violating US restrictions on dealing with Iran.

US Secretary of State Mike Pompeo said on Monday the US is imposing sanctions on Zhuhai Zhenrong Limited and its CEO for violating restrictions on Iran’s oil industry.
Pompeo announced the measures in a speech in Orlando to the VFW.
The US sanctions are part of the Trump administration’s effort to increase pressure on Iran by starving its economy.
Oil exports are Iran’s largest source of foreign income and the US campaign has raised tensions between the two countries.
China has continued to import Iranian oil as other countries have stopped out of fear of US penalties.
Meanwhile, oil prices rose on Monday on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf.  Brent crude futures climbed 79 cents, or 1.26 percent, to $63.26 a barrel.
West Texas Intermediate (WTI) crude futures were up 74 cents, or 1.33 percent, at $56.37 a barrel.
Last week, WTI fell over 7 percent and Brent lost more than 6 percent.
“The events in the Gulf have definitely taken the market into more bullish territory in today’s trading,” said Erik Norland, senior economist at CME Group.
“But that doesn’t mean markets will continue to go higher, and previous incidents in the Gulf haven’t driven up prices much — suggesting that investors’ calculus, rightly or wrongly, is that a war is not very likely.”

HIGHLIGHTS

• China has continued to import Iranian oil as other countries have stopped out of fear of US penalties.

• Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 bpd.

• Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd.

Iran’s Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf in response to Britain’s seizure of an Iranian tanker earlier this month.
The move has increased the fear of potential supply disruptions in the Strait of Hormuz at the mouth of the Gulf, through which flows about one-fifth of the world’s oil supplies, but no major escalation with Britain or the US appears imminent.
“In the cat and mouse game that Iran is playing with the US, it is taking calculated risks,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.

“So far the US is not taking the bait.”
Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 barrels per day (bpd).
Hedge funds and other money managers raised their combined futures and options positions on US crude for a second week and increased their positions in Brent crude as well, according to data from the US Commodity Futures Trading Commission and the Intercontinental Exchange.
Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd, citing disappointing global economic activity.